CASE STUDY

Market Mix Models Improve Profitability for a Food & Beverage Company

Jun 10, 2017

Changing customer needs, leveraging key technology strategies, and understanding millennial preferences have been baffling the marketers in the food and beverage industry. Therefore, it is important to get continuous customer insights to stay on top of these ever-changing lifestyles and preferences. Market mix model is a blend of science and judgment that utilizes historical data to regulate how marketing elements contribute towards a brand’s success.

Marketers in the food and beverage industry are incorporating market mix models to substantiate their marketing budgets with quantitative evidence. Quantzig’s market mix models evaluate returns on marketing spend on various advertising, consumer promotions and digital media platforms. It also quantifies the contribution of marketing activities with a view of calculating ROI and its effectiveness.

The Business Challenge

A leading consumer food products manufacturer was facing several challenges in boosting sales and increasing customer loyalty. Improved economies have led to many food and beverage producers to flock the market with new and innovative products. The client wanted to improve their future media investment strategy, and decision-making ability in the food and beverage industry based on optimization of marketing spends.

Our Approach

Our analytics team identified different sources such as sales data, fixed marketing expenses, variable marketing expenses, competitor sales, and purchase funnel indicators to collect data and merged them to a standard format. The team analyzed the current data to arrive at an acceptably accurate analysis for the market mix optimization assessment.

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Market Mix Models Benefits:

  • Offered real-time solution for investment decisions
  • Calculated cost per point metrics for each media type
  • Developed ROI Simulator
  • Shared response curves to determine the point of diminishing returns

Market Mix Model Predictive Insights:

  • Campaign analysis of each campaign to analyze the ROI and incremental sales generated
  • Gained visibility on the factors that influenced consumer buying behavior
  • A statistical model and data analysis assessed purchase patterns and preferences
  • Comparative ROI across media types based on advanced regression methods

Benefits of Our Approach:

The market mix optimization helped in identifying volume drivers and elements to counter the competitor’s actions. Based on the market mix model solutions, ROI for the key business drivers, recommendations to optimally allocate funds was achieved. The team also revised budget allocation based on revenue and ROI forecast for each channel. The client gained insights into contribution of brand equity vs. advertising on incremental sales and the ROI from each media type.

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